Zomato below 50 rs. Is it an opportunity?

Nice headline. Jefferies is certainly going the extra mile with catchy phrases. But the analyst report totally lacks substance. Not a single point there in is backed by data. Take it with a lot of salt.

This is the same Jefferies who had given a price target of Rs. 170 to Zomato for next 12 months when they initiated coverage exactly 1 year ago - Zomato: Why Jefferies believes loss-making Zomato deserves premium valuation - The Economic Times - Dated 29-Jul-2021.

How to know the cost basis of Zomato shares for pre-ipo institutional investors? I have tried Pitchbook but that ain’t free. Has anyone tried to know at what valuations did some institutions enter Zomato pre IPO?

All anchor investors (Total: 186) @ Rs. 76.

Well, then I must say Jefferies have done a spectacular job indeed, they really guessed the top correctly. Zomato did hit a high of 169 in Nov 2021, ie within 4 months of listing.

Well, I mean pre-anchor investors actually, like when Zomato did their series funding like whatever the alphabet series a b c d e f g whatever was their last funding round pre ipo and pre anchor

This is not a tip by an investment advisor or some telegram/youtube channel, but a research report with a buy call from the research analysts of the firm. The price target in this context implies that the stock should attain that price and stay there for then the analyst believes that the stock is fairly valued over the next 12 months based on their future earnings/profit potential/fundamentals, etc. But certainly not lose 75% of its value from its 12 month down the line fair value projections - Rs. 170. Believe me … its not a hit, but a big miss on their part.

Yeah, you will have to pay for it.

There are no wills and shoulds in investing. Any outcome is probabilistic, and the likeliness of that particular possibility may have been misjudged by the analysts. No one can possibly with any accuracy can predict what the price can do in 1 year, unless the company has been in the business for many years, with secular growth in the coming quarters, with no macro or micro conditions effecting the sales or profits, with favorable tailwinds for the business etc.

So we cannot obviously believe what one or a few analysts say about the stock. Although such reports help in understanding the business or the industry, or at the least we will have some idea about what is happening in that industry and with that company, provided if all the analysts opine the same, and here too the results may surprise the street.

And a frenzy sooner or later will come to end. If all the future growth of a couple of years gets included in the CMP, if the company has no positive cash flows owning to the nature of the business or the stage the business in, if it trades at higher multiples with no supporting story, if public has more holding etc, price may fall, at least temporarily. And these are all local reasons. If any macroeconomic reasons weigh on the future outlook, then the price falls more.

Traders have a field day on days like these, and after that, at some price, may be now I don’t know, depending on many factors, this could be a good investment.

No investment in Zomato.

It does not look like an opportunity to me unless and until there is some sort of positive fundamental change happening. It is still a risky stock and I won’t advise you to keep your hopes high while buying it.

I don’t think that it is an opportunity. The company is already at a loss. On top of that, it acquired Blinikit, which was already suffering losses. There are already negative sentiments about the organic marketing strategies and stocks of the company. So I don’t think it should be considered at the moment because no one is certain about its future.

Many experts like Deepak Shenoy are advising us to wait instead of buying even with the falling prices of Zomato. I am also staying away from Zomato as of now until it shows some signs of strength.

Thinking of investing or looking for quick gains?

I don’t think it’s good to buy zomato. It has a very very low potential of growing. Moreover Zomato is also going to rebrand itself very soon. Most likely Swiggy is going to dominate the market because of its better service and more serviceable options.

i will find value on zomato @ 10 rupees or even below - hellow guys what kind of value you find in zomato - loss making company - have zero values the PE is -49 , if the market crashed heavily the zomato you can get below tomato price

I don’t think this is a good idea. Zomato has been on a negative side for quite a while now. Maybe you should consider sticks that show promise.

Yes Its Better to buy “Tomato” than "Zomato " :thinking:

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Any TIMEFRAME that you have in mind to buy tomato instead of Zomato? :grin:

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Yes ! Tomato prices some times goes to sky and comes back to the ground!

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No. I currently don’t see any reasons to buy Zomato stock. It is a business whose performance falls short of expectations. The valuation is excessive. Furthermore, competition is fierce. Low customer loyalty exists. Therefore, as of right now, I don’t suggest anyone buy this stock for a long time.

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This is from delivery guys point of view.

Now this is from customers point of view. And you expect zomato to break even.

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There is one of the philosophy running around " If you like any product you should be the investor of it ". Well this philosophy was super popular among many retailers but i never found any wealth creation using this philosophy . Its great that I never invested in any my liked company other wise i would have heavy loss. I just love Zomato, Paytm as a product but will never invest until i see valuation ( mainly PE) and Price action+ Volume in uptrend.

In Investing , Emotions should not come in play we should treat company as like Horse X,Y,Z and bet on strongest horse when its ready.